This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the FAQ and RULES. Registering for debate politics is necessary before posting. Register today to participate and remove the ads - it's free!

Re: Income tax; Flat tax; National Sales tax; No tax

Originally Posted by Harshaw

You raise the cost of employing people, employers do less of it. Simple math. You buy less of anything that gets more expensive.

"That argument, however, rests on the simplistic observation that some of the states with high minimum wages also have high unemployment rates. Without more examination, this observation is as useful in understanding state job markets as noting that joblessness has been on the rise in New York since the last time the Yankees won the World Series. It might be true, but it doesn't mean one is causing the other."

"recent studies with improved methodologies have reached the opposite conclusion. In general, there is no valid, research-based rationale for believing that state minimum wages cause measurable job losses. Making the extreme case that the job losses are severe enough to show up in a noticeably elevated state unemployment rate is a wild extension of a largely unfounded theory."

The national perspective

"The connection between minimum wages and unemployment looks even weaker when all 12 states with minimum wages above the federal level are considered (see Table 1):

* Many states without minimum wages set above the federal level (including Michigan, Illinois, South Carolina, and Texas) also had high unemployment rates in December 2003.
* Hawaii, Delaware, and Vermont, three states with higher minimum wages, were among the 15 states with unemployment rates less than 5% (the national average was 5.7%).
* Of the 12 states with higher minimum wages, eight saw a smaller increase in unemployment between 2000 and 2003 than the national average."

Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb

Re: Income tax; Flat tax; National Sales tax; No tax

Originally Posted by Catawba

"That argument, however, rests on the simplistic observation that some of the states with high minimum wages also have high unemployment rates. Without more examination, this observation is as useful in understanding state job markets as noting that joblessness has been on the rise in New York since the last time the Yankees won the World Series. It might be true, but it doesn't mean one is causing the other."

"recent studies with improved methodologies have reached the opposite conclusion. In general, there is no valid, research-based rationale for believing that state minimum wages cause measurable job losses. Making the extreme case that the job losses are severe enough to show up in a noticeably elevated state unemployment rate is a wild extension of a largely unfounded theory."

The national perspective

"The connection between minimum wages and unemployment looks even weaker when all 12 states with minimum wages above the federal level are considered (see Table 1):

* Many states without minimum wages set above the federal level (including Michigan, Illinois, South Carolina, and Texas) also had high unemployment rates in December 2003.
* Hawaii, Delaware, and Vermont, three states with higher minimum wages, were among the 15 states with unemployment rates less than 5% (the national average was 5.7%).
* Of the 12 states with higher minimum wages, eight saw a smaller increase in unemployment between 2000 and 2003 than the national average."

A study which purports to show (looking only at correlation to unemployment rates and no other possible factors) that raising a minimum wage doesn't cause comapnies to fire people in good economic times (judging by unemployment rates stated) has what do with how it will affect companies' decisions to hire people in an uncertain economy?

You're responding to a different argument.

It's not "tolerance" if you already approve of what you purport to "tolerate."

Re: Income tax; Flat tax; National Sales tax; No tax

The effects of artificially increased wages on employment are manifestly obvious if you simply use your head.

Say I'm the CEO of a massive company. I have a budget that balances revenues against outlays. My outlays are divided among things like labor, parts, rent, electricity, etc. The passage of a "living wage" would increase my labor costs per employee, so I have to bring things back into balance. Short of magically cutting my rent or parts costs, there are only two ways I could do this.

First, I can balance for that increase in outlays by increasing revenues in tandem. This would be done by passing on the additional costs to consumers. Since any successful company already prices their products to achieve maximum profit, this will not work. Any artificial increase will result in reduced sales and further damage the company's balance sheet.

Since that won't work, the other way that I can balance that increase in per employee costs is by cutting my total number of employees. This would be done through layoffs or hiring freezes, with the extra work shifted to the retained employees. Given that we see this happen on a daily basis among companies that need to cut costs, this is the obvious result.

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

Re: Income tax; Flat tax; National Sales tax; No tax

Originally Posted by RightinNYC

The effects of artificially increased wages on employment are manifestly obvious if you simply use your head.

Say I'm the CEO of a massive company. I have a budget that balances revenues against outlays. My outlays are divided among things like labor, parts, rent, electricity, etc. The passage of a "living wage" would increase my labor costs per employee, so I have to bring things back into balance. Short of magically cutting my rent or parts costs, there are only two ways I could do this.

First, I can balance for that increase in outlays by increasing revenues in tandem. This would be done by passing on the additional costs to consumers. Since any successful company already prices their products to achieve maximum profit, this will not work. Any artificial increase will result in reduced sales and further damage the company's balance sheet.

Since that won't work, the other way that I can balance that increase in per employee costs is by cutting my total number of employees. This would be done through layoffs or hiring freezes, with the extra work shifted to the retained employees. Given that we see this happen on a daily basis among companies that need to cut costs, this is the obvious result.

Yes, but you have to keep in mind -- companies (ALL companies) are limitless sources of cash for which no requirement, restriction, or tax could possibly have a deleterious effect or unintended consequence. And if it does, it's only because the tophat-wearing owners are hoarding more and more for themselves and their mustache wax.

It's not "tolerance" if you already approve of what you purport to "tolerate."

Re: Income tax; Flat tax; National Sales tax; No tax

Originally Posted by Harshaw

Yes, but you have to keep in mind -- companies (ALL companies) are limitless sources of cash for which no requirement, restriction, or tax could possibly have a deleterious effect or unintended consequence. And if it does, it's only because the tophat-wearing owners are hoarding more and more for themselves and their mustache wax.

And even if there is a negative effect on profits, that's okay. Companies should not be organized for the sole purpose of earning money for their shareholders, they should be organized for the purpose of achieving amorphous and ever-changing social goals.

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

Re: Income tax; Flat tax; National Sales tax; No tax

Originally Posted by RightinNYC

And even if there is a negative effect on profits, that's okay. Companies should not be organized for the sole purpose of earning money for their shareholders, they should be organized for the purpose of achieving amorphous and ever-changing social goals.

Well of course -- the cost of all requirements, restrictions, taxes, assessments, etc., always come out of profit and profit only -- it never affects employment, consumer prices, or anything else.

It's not "tolerance" if you already approve of what you purport to "tolerate."

Your first link looks at one state, the research looked at one rate and did not consider other factors related to unemployment. The report I referenced studied 12 states and did consider the other factors.

Your second link shows the net effect is positive -

"We confirm our earlier findings that business assistance living wage laws boost wages of the lowest-wage workers, at the cost of some disemployment, but on net reduce urban poverty. Second, we expand the analysis of distributional effects beyond looking just at the poverty threshold. We do not find that living wages increase the depth of poverty among families that remain poor, and we find that families somewhat below and somewhat above the poverty line are also helped by living wages. Finally, we suggest that the poverty reductions generated by living wages may stem from income gains for individuals with higher wages or skills who are nonetheless in poor families, rather than for the lowest-wage or lowest-skill individuals. "

Your third link is an opinion piece.

Do you honestly prefer government assistance over a full-time worker earning a living wage?

Last edited by Catawba; 01-12-10 at 01:34 AM.

Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors, we borrow it from our Children. ~ Ancient American Indian Proverb